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President Obama has moved to boost the US nuclear power industry, proposing massive government loan guarantees for construction of new stations and setting up a panel to sort out nuclear waste policy.

The New York Times reports that the White House will include $54bn of loan guarantees in the 2011 budget request to Congress, up from $18.5bn. The idea is to provide investors with enough certainty to move ahead and build new power stations.

At the same time, Obama's energy secretary Steven Chu announced the appointment of a new commission on nuclear waste, hinting that at least some waste might be re-used as fuel in the future rather than being put into long-term storage.

In the early days of nuclear power it was assumed that spent fuel would be reprocessed and reused, because it was thought that uranium was so rare that no other plan could make sense. In the event, however, uranium turned out to be more common than expected. Some nations undertook reprocessing activities anyway, but new fuel has so far remained cheap enough that generally these have been commercially marginal - though perhaps worthwhile from the viewpoint of national weapons programmes.

The USA has never reprocessed its powerplant wastes for a different reason: because doing so creates material with weapons potential. The US government has considered that it's better to have a large waste stockpile than create more weapons-grade material than required and risk it falling into the wrong hands before being used.

However, firm plans for exactly where all the US waste should be stored have proved difficult to sort out. In theory the intention has been to have a long-term dump at Yucca Mountain in Nevada, but this has always been controversial and the plan has existed for decades without being finalised. President Obama spoke against the Yucca Mountain scheme during his election campaign, and last year the US Nuclear Waste Technical Review Board seemed to move away from it and towards the idea of re-using spent fuel.

Nuclear engineers estimate that 75 per cent of significant wastes could be easily used as fuel, and this could rise to 99 per cent if new technologies were introduced.

Reprocessing on this scale is still seen as unlikely in America, though. The New York Timesreports only that future plans "could make some use of nuclear waste".

The paper notes that President Obama's pledge last week to build “a new generation of safe, clean nuclear power plants" drew applause from politicians of both US parties, a rarity during his State of the Union speech. ®